At some point, I am going to have to decide whether I will stay in Alexandria, Virginia, or move after I retire. Relocating isn’t essential. Moving would mean selling a 1940s era townhouse I love, possibly at a small loss. But my mortgage isn’t cheap, and I could cut my housing expenses. I am considering three factors: family, affordability and taxes. 

As a single person, I would prefer to live closer to one (or more) of my sisters as I age, but they are scattered across the country. It would be comforting to have a local family support system. Hopefully, they feel the same. 🙂

I love where I live and there are financial considerations to any move. With a significant income reduction, I would be looking at a cheaper not more expensive city. State tax rates and treatment of retirement income will be an important consideration.

Virginia does not tax Social Security, but it does tax your entire income, including federal pensions. I could head north to Pennsylvania, which exempts Social Security, pensions and 401(k) distributions. Or, if I jumped to New York State, where two of my sisters live,  Social Security and federal pensions are exempt from taxation. Then again, I could head west to Seattle, Washington, where I lived for many years, and not have to deal with state taxes at all.

Each has other affordability issues. Housing in Seattle is overpriced and sales taxes are high. New York State has one of the highest property tax rates (if I purchased a home). Pennsylvania is a total unknown. Are low taxes enough of a consideration? 

Click on this link for Kiplinger’s excellent State-by-State Guide to Taxes on Retires.